After posting a robust growth in the last six months, exports registered a lower growth in July due to sluggish demand for leather, handicrafts and readymade garments in the traditional European and U.S. markets, leading to a sharp rise in trade deficit to $12.93 billion.
Exports grew (year-on-year) only by 13.2 per cent in July. The growth was 30.4 per cent in June. Shipments stood at $16.24 billion while imports grew by 34.3 per cent to $29.17 billion in July, resulting in a trade deficit of $12.93 billion.
“The trade deficit is much larger than it used to be before. Exports grew only 13.2 per cent. This is not a good number,'' Commerce Secretary Rahul Khullar conceded on Tuesday.
Surge in imports
In the first four months of this year, exports increased by 30.1 per cent to $68.6 billion, while imports surged by 33.3 per cent to $112.2 billion, resulting in a trade deficit of $43.6 billion. The government has set an export target of $200 billion in the current fiscal. Mr. Khullar said the government was optimistic and the target would be achieved if exports grow by at least 15 per cent for the rest of the year.
Federation of Indian Export Organisation (FIEO) President A. Shakthivel said the continued rise in exports showed that the diversification of export destinations through the focus market scheme and the market linked focus scheme had started yielding results. He said the growth was largely attributable to growing exports to Africa, Latin America, West Asia and the Asian region.
He said the government should bring sector specific package for apparel, textiles, leather and tea in the revised Foreign Trade Policy.
